WHITE PAPER = INDUSTRY OVERVIEW At this level of concentration, processors exert a tremendous amount of power driving down the price paid for commodities on the cash market. This is done through two practices: 1) Captive Supply, or direct processor ownership of cattle or or other produce. When prices are high on the cash market, processors can meet their daily quotas by purchasing from their own inventories for a lower price, forcing the cash market to follow suit; 2) Formula contracts. These contracts are not bid on the open market and their terms and conditions are not shared with other producers. The effect of these contracts is to remove produce from the market for an unknown price thus filling up the demand of the processors while forcing the cash market to bid lower on produce in order to meet the lessening demand of the packers. Captive Supply is the plain English version of the above. PRACTICAL OBJECTIVE This would be a very simple -one dimensional BILL which in order to achieve the Purpose above- all we are asking for is 100% compliance in transparency of contract /supply Offers! Very little would have to change in any industry BUT the mere fact that ALL the information is available to a primary producer /seller on any given day to decide where when and who he will sell too ...WILL allow the physical market price to find a true level based on the supply demand dynamics. The kicker of course is the phrase thatno processor or downstream trader can give undue or unreasonable preference to one producer over another Obviously the 70-80% of product( in cattle anyway that go in on direct consignment) would have to be QUOTED and OFFERED on the mandatory disclosure website AHEAD of any deals and ALL producers who can satisfy the buying criterior should have equal access to supply. For the buyers- a good offer will lead to the booking capacity being filled quickly and that would lead to a lower offer or no offer. They would have a secure log in facility to adjust their daily parameters - just as they do now with their kill and feeder grids. The big difference is that the subservient , cap in hand mindset will be broken as we will have access to the true market volatility ( be it good or bad) . Of course the auction system is normally a true indication and would continue but with all secret contracts revealled- both buyers and sellers would have the choice which way they want to go. ALLIED SUPPORT We intend to seek people power support by getting all the Industry groups and State Farming Organisations on board to have our Parliament pass this Bill. We arent asking for market support or regulation and it may not lead to much price increase initially BUT it certainly will when the present DISTORTIONS unravell! We have waited for the ACCC to act for decades but they are a token puppet- my industry ( beef and sheep) along with many others are near terminal. Timing is vital. Any queries-07 46257321 Proposed to be Enacted within 90 Days of Presentation 2013. A very detailled exposee to support this bill can be found here- justgroundsonline/forum/topics/how-to-bring-an-industry-... END
Posted on: Sun, 03 Nov 2013 04:40:38 +0000